Your guide to FX Trading.

Forex Guide

Here at Forex Ebook, we would like to provide you with a clear, no nonsense guide to trading Forex. Whether you are new to FX trading or have some experience, our guide can help you along your journey. For more advanced traders, if you feel you can contribute to our guide, please do let us know.

First and foremost, know one thing, if you don’t aleady. Forex trading isn’t easy. Don’t expect to read our guide in one night and think you’ll become profitable the next day. Before you can make it in this game, you’ll need solid foundations. Yes we’ve all heard that the world’s richest man is a financial trader and investor, (namely Warren Buffet, sometimes swapping places with Bill Gates), but even he had to start somewhere – at the beginning.

So, this is where our forex guide comes into play. It covers a variety of topics, from forex brokers to forex systems, from technical analysis to fundamental analysis, from platforms and charting to automated trading. Below are some extracts from the guide’s different chapters:

Forex Brokers: In the past, before the internet age, Forex trading was limited to the big boys, such as the banks. Now however, with the arrival of the internet, retail forex brokers have opened their doors for anyone. So now, individuals, companies, other firms & institutions can easily buy and sell currencies in less than a fraction of a second, with the use of a computer and an internet connection, via a forex broker…

Forex Systems: In Forex trading, charts are a visual representation of price. By price, we mean the exchange rate. It tells us how much a currency is worth compared to another currency. You need charts to help you determine the potential trend. A chart simply contains a representation of “price action”, i.e. those bars going up and down. Those bars you see are known as “candlesticks”, and because price fluctuates up and down constantly, you’ll see that the candlesticks are going up and down constantly… There are certain forex indicators that can help traders determine the trend direction.

Technical Analysis: There are a number of technical analysis tools available to traders at their disposal. Such as trendlines, pivots, and fibonacci, to name just a few. Fibonacci is one of the favourites, which entail a number of special ratios to which price often reacts. These special ratios or percentages are used today in Forex trading. They allude to the fact that price reacts to certain numbers / ratios, and this reaction can be used to help traders to buy or sell a currency, and therefore profit from it. Hence, just as we’ve seen where price reacted to the resistance; price can also react to Fibonacci ratios, known as retracements or extensions…

Fundamental Analysis: As you can see, each country has their own news, specific to them. Some of these are not really important, others are. The more important each news release is, the more of an effect it will have on the market. In this section, we are going to take a look at some of the most important news releases from a handful of countries…

Forex Platforms: Different internet brokers have different software (or platforms) that allow you to buy and sell currencies (24 hours a day, 5 days a week), but the most popular platform is called Metatrader 4, (often shortened to MT4), for Microsoft Windows. MT4 is easy to use, powerful, and absolutely free…

Forex Systems: You might be looking at the above charts in the technical / fundamental sections and be thinking, “Anyone can make money doing that, price just goes up or down!” Well, do not think it’s that easy. You usually need a few reasons to make a decision to enter the market. A system helps in making those decisions…

Money Management: Remember, money management is related to your deposit/equity. The best way to calculate your risk (i.e. Stop Loss), is to decide how much you’re willing to lose on any given trade, in terms of percentage…

EAs / Robots: An Expert Advisor (often shortened to EA) is a piece of software that does all the hard work for you. Believe it or not, EAs are now so advanced, that you can simply load up MT4, apply the EA to any currency chart, and let it trade for you – totally automated trading, totally hands-free, totally unaided. Sounds amazing right? There is however, one main problem…

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